57 Month Sentence in Scheme to Defraud Financial Institutions

Ray M. Mubarak, 56, Knoxville, Tennessee, was sentenced to serve 57 months in prison for conducting a scheme to defraud financial institutions and engaging in an unlawful monetary transaction with fraudulently-obtained loan proceeds. He was also ordered to pay $1,993,938.44 in restitution to three banks and a title insurance company that lost money as a result of the scheme.

Mubarak pleaded guilty in May 2015 to federal charges stemming from his scheme to defraud multiple banks into loaning him over $6 million. He submitted false tax returns and personal financial statements which grossly inflated his income and net worth in order to qualify for the loans. Mubarak also admitted to defrauding the banks by causing them to rely on a fraudulent title opinion letter and forged loan closing documents and deeds.

Marbarak was sentenced by the Honorable Pamela L. Reeves, U.S. District Judge. The investigation was conducted by the Internal Revenue Service – Criminal Investigation and Federal Bureau of Investigation. The investigation and prosecution of Mubarak was coordinated with the Office of the District Attorney General, 6th Judicial District. Matthew T. Morris, Assistant U.S. Attorney, represented the United States.

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